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Health Groups Comment to Senate on Health Care Bill

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SEE REGULAR DIRECTORS, PAGE 5

Academy Announces Slate of Regular Directors and Online Election in August

THE ACADEMY’S NOMINATING COMMITTEE has presented a slate of four candidates to serve as regular directors on the Academy Board of Direc-

tors to be voted on by the membership in an online elec-tion in August. The nominees are:

S Bruce Cadenhead, vice chairperson of the Academy’s Pension Committee;

S Tim Geddes, vice chairperson of the Academy’s Pension Practice Council;

S Stu Mathewson, a member of the Academy’s Flood Insurance Work Group; and

S Tricia Matson, chairperson of the Academy’s Longevity Task Force.Geddes is nominated to serve the remaining year

of a three-year term that will expire in 2018. The other three are nominated to serve three-year terms as regular directors expiring in 2020. Mathewson is currently on the Academy Board and was elected last year to a then- remaining one-year term that will expire this fall.

Cadenhead, a member of the Pension Practice Coun-cil since 2013, has served the Academy with webinar and in-person presentations on pension and retirement issues.

Cadenhead Geddes

MatsonMathewson

Annual Volunteer Survey Released; Responses Due July 14

THE ACADEMY released its annual volunteer sur-vey on June 28. The annual survey offers members an easy vehicle to express their interest in taking an

active part in the important work of the Academy. Members were invited by email to complete the sur-

vey, which is also available in the members-only section of

the Academy website. Responses are due by

Friday, July 14.The survey,

which takes only a few minutes to complete, describes Acad-emy committees, particularly not-

ing those that are

actively seeking volunteers. It is more likely that those committees listed as “Actively Seeking Volunteers” will select volunteers from among those who identify their desire to volunteer for them.

Volunteering for the Academy offers the benefits of professional growth, career development, networking opportunities, developing relationships with leaders within the profession, and expanding your knowledge of issues that affect your work and practice. Your participa-tion on Academy committees and projects is vital to the profession. It even enables the Academy to identify future leaders of the actuarial profession.

Completing the annual volunteer survey is your first step to maximizing opportunities for leadership, net-working, and your own professional development. Take the survey now and join your many peers in advancing the Academy’s mission to serve to the public and the profession.

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To continue receiving the Update and other Academy publications on time, make sure the Academy has your correct contact information.

Academy members can update their member profile at the member login page on

the Academy website.

For a list of all previous and upcoming Academy events, please visit the Academy’s

online Events Calendar.

SEPTEMBER11–13 Fall PBR Boot Camp, Las Vegas

NOVEMBER12–16 Life and Health Qualifications

Seminar, Arlington, Va.

14–15 Annual Meeting and Public Policy Forum, Washington, D.C.

DECEMBER7–8 Seminar on P/C Effective Loss

Reserve Opinions, Chicago

C A L E N D A R

Academy NEWS BriefsAnnual Meeting and Public Policy Forum Sessions Information Released; Renowned Journalist Bob Woodward to Give Keynote Address

THE ACADEMY RELEASED practice-area breakout-session information for the 2017 Annual Meeting and Public Policy Forum,

to be held Nov. 14–15 in Washington, D.C., and announced that Washing-ton Post Associate Editor Bob Woodward, the two-time Pulitzer Prize-win-ning reporter of Watergate fame, will deliver a key-note address at a Nov. 14 general session.

Woodward, who broke the Watergate story with Carl Bernstein and is a best-selling author of books covering the past eight presidents, will bring his fact-based, tough-minded reporting perspective and extensive historical knowl-edge of the presidency to the key question of what the nontraditional Trump presidency means for the country.

Also presenting at the event on Nov. 15 will be two of Washington’s most seasoned polit-ical commentators—nationally syndicated columnist and PBS NewsHour political ana-lyst Mark Shields and ABC News contributor and veteran Republican campaign consultant Alex Castellanos. The two will join a roster of experts on what’s happening in Washington, offering a candid analysis—and interactive dis-cussion with the audience—of how the political landscape has changed in the wake of last year’s election, what’s really going on in the capital, and why you should care.

Breakout sessions will deliver the latest on today’s top public policy and professionalism issues, including updates on health care, tax, pension, and financial services regulation and policymaking. Get the strategic information you need to stay current—make plans to join us in November at the Fairmont Hotel in Washing-ton. Register today to secure early registration rates. (Note: Life session information will be released soon.)

Casualty Breakout SessionsFollowing are the property/casualty breakout sessions for the Academy’s Annual Meeting and Public Policy Forum.

➥ Flood Insurance: The Changing Picture—The National Flood Insurance Program (NFIP) will expire on Sept. 30 unless Congress reauthorizes it. What changes can we expect? What does the future look like for insur-ers, regulators, actuaries, and consumers? What is the new role for private insurers in the flood insurance market? How might rising sea levels affect the NFIP? (Estimated continu-ing education (CE) credit: 1.8)➥ Auto Insurance in the

21st Century—Speakers will provide an intriguing look at new and emerging technologies and how they will impact—and already are affecting—automobile insurance. Included will be a discussion of autonomous vehicles, shared vehicles, and distracted driving and how these new developments will impact consumers, regulators, and insurers. (Estimated CE: 1.8)➥ 2018 Preview: A Survey of the State & Federal Landscapes—Speakers will address expected hot topics for next year in Congress, the state legislatures, and state regulatory agen-cies. Topics to be discussed may include: climate change, cyber risk, risk-based capital, travel insurance, Big Data, international reserving stan-dards, and more. (Estimated CE: 1.8)

Health Breakout SessionsFollowing are the health breakout sessions for the Academy’s Annual Meeting and Public Pol-icy Forum.➥ The Uncertainties in Health Care (Part 1)—In the wake of a new administration and a Republican-controlled Congress, efforts to repeal and replace the Affordable Care Act have taken

Woodward

SEE ANNUAL MEETING, PAGE 9

www.actuary .org Actuaria l UPDATE JUNE 2017

3www.actuary .org Actuaria l UPDATE JUNE 2017

LHQ Seminar Agenda Released

ARE YOU AN ACTUARY who wishes to be qualified to issue actuarial opinions for either the NAIC Life and A&H Annual Statement or the NAIC Health Annual Statement? If so, make plans to attend the 2017 Life and Health Qualifica-tions Seminar, Nov. 12–16 in Arlington, Va. This highly regarded seminar provides three days of training and instruction,

along with the opportunity for attendees to take the Specific Qualification Standard exam on the final day. For more experienced actuaries, it serves as an excellent basic education refresher or as a source of required continuing education. Attendees can earn up to 27 hours of continuing education, including up to 2.7 professionalism hours. A new agenda-at-a-glance is available to give those interested more information about the topics and sessions available in this popular seminar—register today for the lowest rates and to secure your space.

Pension, Casualty Briefings on Capitol Hill

THE ACADEMY HOSTED separate briefings in late June on flood insurance and multiemployer pension plans on Capitol Hill in Washington, which were well attended by

congressional and federal agency staff.

CPC Briefing on Flood Insurance As Congress considers legislation to revise and reauthorize the National Flood Insurance Program (NFIP), the Casualty Practice Council (CPC) presented a Capitol Hill briefing on flood insur-ance to congressional staff and others on June 26.

Stu Mathewson and Nancy Watkins, members of the CPC’s Flood Insurance Work Group, formed the panel, with Senior Casualty Fellow Jim MacGinnitie moderating. Reviewing the work group’s flood insurance monograph released in April, the presenters underscored the Academy’s support for expanding the role of private insurance coverage for flood. The briefing was well attended by more than 40 people, including congressional staff and representatives of the Government Accountability Office and Congressional Budget Office.

Presenters also expressed concern that none of the pending legislative proposals include a serious plan to repay or forgive

the NFIP’s past and future debts attributable to infrequent mega-storms, and they reminded attendees that rising sea levels are expected to cause an increase in the frequency of coastal flooding and in the severity of mega-storms.

Multiemployer Issue Brief ReleasedThe Pension Practice Council (PPC) hosted a June 27 Capitol Hill briefing on multiemployer issues that was attended by more than 80 people.

The PPC released the issue brief, which provides an objective overview of the fragile state and future security of the multiem-ployer pension system. Of the more than 10 million people who participate in multiemployer pension plans, about 1 million are in plans that are currently projected to be unable to pay the full ben-efits that have been promised.

The speakers—Bill Hallmark, the Academy’s vice president, pension; Josh Shapiro, chairperson of the Multiemployer Plans Subcommittee and nominee to be the next vice president, pen-sion; Christian Benjaminson, a member of the Multiemployer Plans Subcommittee; and Ted Goldman, senior pension fel-low—discussed ideas from the brief about how to address trou-bled multiemployer plans and strengthen the multiemployer pension system.

Pension Vice President Bill Hallmark (right) presents at the June 27 multiemployer plan briefing on Capitol Hill

Nancy Watkins (at podium), a member of the Flood Insurance Work Group, addresses attendees at the June 26 casualty briefing

Academy NEWS

4www.actuary .org Actuaria l UPDATE JUNE 2017

Contingencies Wins Award

THE September/October 2016 issue of Contin-

gencies, the Academy’s bimonthly magazine, won an Excel Award for excellence in publishing at the Association for Media and Publishing conference in Washing-ton on June 26. The issue received the gold award for top prize in the design category for the cover story, “In the Red Zone: Sports Con-cussions—Past, Present, Future.”

Webinar Covers Issues Surrounding Global Pandemic Risk

THE ACADEMY HOSTED a June 6 webi-nar, “A Global Look at Pandemic Risk,” in which presenters gave an overview of the

escalating factors for epidemic and pandemic risks and associated costs with respect to infra-structure, technology, and lifestyle modifications.

Eddy Rubin, chief science officer for Met-abiota, gave an overview of the history of epi-demics; Petra Wildemann, Metabiota’s head of business development and risk products for Europe and the United Kingdom, presented on large-scale risks in reinsurance; and Paul Nunn, head of catastrophe risk modeling for SCOR Global P&C, covered catastrophe risk modeling. The webinar was moderated by Susan Mateja, chairperson of the Academy’s Health Practice International Committee.

Slides and audio are available to members free of charge.

Recently Released

ACTUARIAL ORGANIZATIONS, including the Academy, that repre-sent the actuarial profession in the

United States and Canada reported June 28 that the Actuaries Climate Index (ACI) value for fall 2016 was 2.07—the highest seasonal level recorded for the two coun-tries combined. “We have now seen four

of the last five seasons having an Actuaries Climate Index value over 1.50, compared to the 30-year reference period, which had no index values above 1.00,” said Doug Collins, chairperson of the ACI Climate Change Committee.

The latest Enrolled Actuaries Report has coverage of the 2017 Enrolled Actuaries Meeting, including plenary sessions on the post-election climate in Washington; actuarial standards of practice and actuar-ial communications for pension actuaries; lifetime income options; and ethics and professionalism.

The June HealthCheck covers the latest Academy activities in the health care sphere, including a roundup of recent media coverage. Also in this issue are comments by the Health Practice Council and Medicare Subcommittee to Congress, and legislative, judicial, and regulatory updates from the states and the federal government.

The Summer 2017 issue of Retirement Account covers the Social Security Commit-tee’s issue brief on Social Security and women; and comments to the IRS and Trea-sury Department on projections of cash bal-ance plan benefits.

Regulator-Focused PBR Boot CampRegistration will open soon for the Academy’s popular PBR Boot Camp, to be held Sept. 11–13 in Las Vegas. The fall Boot Camp, the Academy’s fourth, includes new content aimed at providing regulators—and others who are working closely with regu-lators to implement and audit prin-ciple-based reserving (PBR)—with essential background information and key learning experiences.

5www.actuary .org Actuaria l UPDATE JUNE 2017

Regular Directors, continued from page 1

“As policy debates become increasingly divided along ideological lines, it becomes more important to maintain the Academy’s reputation for providing objective anal-ysis without shying away from tackling challenging issues,” Cadenhead said. “My goal is to help the Academy continue to be effective in striking that balance.”

Mathewson is a member of the Flood Insurance Work Group and Natural Catastrophe Subcommittee, and his Acad-emy service includes stints as chairperson of the Flood Insurance Subcommittee (2007–2012) and co-chairperson of the P/C Extreme Events Committee (also 2007–2012). He is currently on the Acad-emy Board, and was elected last year to the then-remaining one year of a three-year term that will expire this fall. He is being nominated to a new, full three-year term.

While his background is primarily in casualty issues, such as the National Flood Insurance Program, Mathewson said he recognizes the “critical importance” of the Academy’s work in other areas, such as Social Security and health insurance.

“I believe that the Academy has unique capabilities in these areas and I am com-mitted to seeing that those capabilities are employed in a way that assures the Academy continues to be viewed as a go-to source of objective information for the public good,” he said.

Matson, a past chairperson of the Actu-arial Standards Board, has also served as chairperson of the Longevity Risk Task Force and on several Academy committees related to financial reporting, risk-based capital, and risk management. She was awarded the Academy’s Outstanding Vol-unteerism Award in 2015.

“Unlike many professions, our code of conduct creates minimum standards for our work that enable the public to place trust in actuarial work from which they receive benefit,” Matson said. “The work of the Academy committees and volunteers help to advance actuarially informed per-spectives that will benefit the public good … [and] I want to support Academy efforts to maintain a sustainable volunteer group to continue this mission into the future.”

Geddes’ volunteer service to the Acad-emy includes having served on the Pension Committee and as a webinar presenter on pension and retirement issues. “My service on the Board will allow me to provide fur-ther input into the Academy’s agenda and priorities to address the myriad of complex and important issues facing the actuarial profession and the public,” he said.

The Academy membership will vote on the slate of regular director candi-dates during an online election to be held from Aug. 4 to Aug. 25. All Acad-emy members as of the voting eligibility cutoff date—which the Academy will announce in advance to the member-ship—will receive voting instructions and ballots by mail or email.

Incoming directors’ terms will begin on Nov. 14 at the close of the Academy’s Annual Meeting of the membership in Washington. For more information about the Nominating Committee Guidelines for selection of candidates and other election details, please visit the Academy’s Board Election Center.

Life & Health Qualifications SeminarNOVEMBER 12-16, 2017 | KEY BRIDGE MARRIOTT, ARLINGTON, VA

Qualify to issue actuarial opinions for the NAIC life and health annual statements. Earn up to 27 hours of CE at this annual seminar.

T O P I C S I N C L U D E :Asset adequacy testing | Statutory insurance accounting | Valuation and nonforfeiture requirements

Health insurance valuation topics | Premium, loss, expense, and contingency reserves | Risk-based capital

REGISTER AT ACTUARY.ORG

6www.actuary .org Actuaria l UPDATE JUNE 2017

IN THE NEWS

Academy Senior Health Fellow Cori Uccello commented to the New York Times on a proposed “lockout” period for continuous coverage being discussed for the Senate version of the American Health Care Act (AHCA).

The Associated Press quoted Uccello in a June 28 story—which was published by more than 400 media outlets—about health care costs to consumers under the Senate’s health care discussion draft bill.

A Bloomberg BNA article reported on the Academy’s June 26 Capitol Hill briefing, in which Senior Casualty Fellow Jim Mac-Ginnitie and Flood Insurance Work Group members Stu Mathewson and Nancy Wat-kins gave a presentation based on the work group’s recent monograph on the National Flood Insurance Program. Business Insur-ance and E&E News also reported on the briefing.

In a HealthDay article, Uccello discussed the important role of costs in the premium rates insurers are proposing for 2018. The article was reprinted by several media outlets, including UPI, Newsline, Philly.com, Doctors Lounge, Health On the Net Foundation, and Drugs.com.

A Policy & Medicine story covering the Capitol Hill forum hosted by the Alliance for Health Reform in May cited Uccello’s comments as a panelist on the individual health insurance market.

A subscriber-only California Broker article cited Uccello on how changes to health insurance markets would affect risk adjustment.

Oklahoma’s Nursing Times cited the Health Practice Council’s issue brief examining ways the individual health insurance market can be strengthened and made more viable.

The Health Practice Council’s concerns regarding the uncertainty surrounding cost-sharing reduction payments were cited in a Wolters Kluwer Law & Business article.

The Academy’s issue brief on 2017 health premium drivers was cited in a Modern Healthcare story discussing a recently introduced bill that would make reinsurance a permanent part of the ACA’s individual exchanges.

The Casualty Practice Council’s June 26 Capitol Hill briefing and monograph on

the National Flood Insurance Program received media cov-erage from several outlets, including Bloomberg BNA, Cli-mate Wire, and Business Insurance.

The Academy was mentioned in a Wash-ington Examiner article covering Sen. Bill Cassidy’s (R-La.) meeting with insurers and Republican senators on the status of the individual health insurance market and on repeal and replacement of the ACA.

An opinion piece published in the Atlanta Journal-Constitution discussing Georgia’s Teacher Retirement System cited the Academy’s analysis that all plans should have the objective of accumulating assets equal to 100 percent of a relevant pension obligation.

A Pinnacle Actuarial Resources blog post describes how the Academy’s jointly sponsored Actuaries Climate Index and forthcoming Actuaries Climate Risk Index can help provide valuable data regarding climate change to the actuarial profession, insurers, and the public.

Professionalism News

ASB Approves Exposure Draft of a Revision of ASOP No. 42

THE ACTUARIAL STANDARDS Board (ASB) recently approved an exposure draft of a revision of Actu-

arial Standard of Practice (ASOP) No. 42, now titled Health and Disability Actuarial Assets and Liabilities Other Than Liabilities for Incurred Claims.

The proposed revised standard pro-vides guidance to actuaries estimating or reviewing health and disability actuarial assets and liabilities, other than liabilities for incurred claims, when preparing or reviewing financial reports, claims studies, rates, or other actuarial communications as

of a valuation date, under a health benefit plan, as defined in section 2.7 of the stan-dard. The ASOP complements the recently revised ASOP No. 5, Incurred Health and Disability Claims.

Key changes from the existing ASOP No. 42 include clarifying language to ensure reasonable guidance exists for actuarial liabilities and assets that are now

common, which generally did not exist when ASOP No. 42 was originally adopted; revising and adding definitions for clar-ity; and providing clarity in the guidance regarding premium deficiency reserves.

The comment deadline for the expo-sure draft is Sept. 30. Information on how to submit comments can be found in the draft.

➥ Judy Stromback joined the ASB Modeling Task Force.

PROFESSIONALISM BRIEFS

7www.actuary .org Actuaria l UPDATE JUNE 2017

Professionalism OutreachBeuerlein Focuses on ‘Professionalism in Practice’ at Austin MeetingContinuing a theme that he has been addressing throughout his presidential term, Academy President Bob Beuerlein dis-cussed applying actuarial professionalism in daily practice at the Southwest Actuarial Forum’s June 9 meeting in Austin, Texas. Beuerlein reviewed the professionalism mission, infra-structure, and resources established through the Academy to support actuaries in meeting high professional standards.

Ward Presents at Texas MeetingCouncil on Professionalism member Mike Ward presented on, “professionalism developments in 2017,” at the spring meeting of the Actuaries’ Club of the Southwest in Corpus Christi, Texas.

Academy Presents on Professionalism, Public PolicyAcademy General Counsel and Director of Professionalism Paul Kollmer-Dorsey and Senior Pension Fellow Ted Goldman pre-sented on behalf of the Academy at the Southeastern Actuaries Conference meeting the week of June 19 in Jekyll Island, Ga. Koll-mer-Dorsey spoke about the professionalism infrastructure for U.S. actuaries housed at the Academy and recent professionalism developments and, in a separate session, Goldman provided an overview of Social Security reform options and prospects.

Bykerk Presents in ArizonaCouncil on Professionalism member and Past Academy Presi-dent Cecil Bykerk gave a professionalism presentation at the Casualty Actuaries of the Desert States June 30 meeting in Scottsdale, Ariz.

Webinar: Actuary-to-Actuary Communications

THE ACADEMY HOSTED a June 28 professionalism webinar, “ Actuary-to-Actuary

Communications.” In the highly interactive session, pre-

senters Academy President Bob Beuerlein, Council on Professionalism member Cecil Bykerk, and Actuarial Board for Counsel-ing and Discipline (ABCD) Past Chairper-son Janet Fagan discussed relevant pre-cepts of the Code of Professional Conduct and topical case studies from different practice areas and employment situations that resonated with the large audience of more than 1,600.

Beuerlein kicked off the webinar—mod-erated by Paul Kollmer-Dorsey, Academy general counsel and director of profes-sionalism—with an overview of how the Code and actuarial standards of practice (ASOPs) can be used to frame communi-cations between actuaries, highlighting ASOP No. 1, Introductory Standard of Practice; ASOP No. 41, Actuarial Communi-cations; and Precepts 4 (Communications) and 8 (Control of Work Product).

Questions from the audience showed a high level of engagement and interest in the topics, particularly how one deter-mines if an issue is “resolved.” In conclud-ing comments, the panelists—all former chief actuaries at points in their distin-guished careers—suggested a few ideas for the audience in response to some of the common questions that had arisen.

Beuerlein noted that he had found suc-cess in starting difficult conversations with other actuaries about work related questions by starting with “In the spirit of straightfor-ward communication…” while Bykerk said he would always ask “Have you looked at the ASOPs?” whenever an actuary presented a report for review. Fagan noted that her/their advice were not limited to “junior actuaries,” and that actuaries in every stage of their careers should be reminded to reread and refer to the Code and ASOPs in carrying out their work.

Bykerk discussed the “golden rule” of the actuarial profession, Precept 10, which addresses potentially uncomfortable situa-tions, such as when a principal replaces one

actuary with another or an actuary has a fee dispute with a principal. Fagan focused on Precept 13, which deals with violations of the Code and is one of the keys to an indepen-dent, self-regulating profession, and empha-sized the ABCD’s role.

The speakers used four case studies to illustrate how an actuary could put these professionalism expectations into practice. Beuerlein wrapped up by noting, “If the Code and ASOPs are the building blocks of the profession, communication is the mor-tar that holds it all together.”

The presentation was recorded and is available to members free of charge in the archived professionalism webinar section on the Academy’s website.

From left, Fagan, Kollmer-Dorsey, Beuerlein, and Bykerk go over last-minute prep for the June 28 professionalism webinar

TO BE QUALIFIED UNDER the Qualification Stan-dards for Actuaries Issuing Statements of Actuarial Opinion in the United States (the USQS), actuaries

must “complete and document” 30 hours of “relevant con-tinuing education” (CE) each year.

The USQS identifies various choices for meeting the 30-hour CE requirement. While 6 hours of CE must be from “organized activities,” involving interaction with actuaries or other professionals working for different organizations, the remainder can be from “other activities.” According to the USQS, “other activities” encompasses a broad variety of activities, from read-ing actuarial literature and lis-tening to recorded conferences to attending seminars and vol-unteering on a professionalism committee. (Relevant CE also includes at least 3 hours of pro-fessionalism CE and not more than 3 hours of business and consulting skills CE.)

Whatever form of CE an actuary completes, the USQS requires the substance to be “relevant” to the actuary’s cur-rent or intended practice. The USQS describes actuarial sci-ence as “a constantly evolving discipline” and notes that “it is important that [actuaries] remain current on emerging advancements in actuarial practice and science that are relevant to the Actuarial Services they provide.” Keith Passwater, chairperson of the Academy’s Committee on Qualifications, states the objective of CE more succinctly: “CE should make you a better actuary.”

The General Qualification Standard provides baseline guidance on relevance. Section 2.2.7 states that CE is “rel-evant” if: 1. it broadens or deepens your understanding of one or

more aspects of your work; 2. the material expands your knowledge of practice in

related disciplines that bear directly on your work; or3. it facilitates your entry into a new area of practice.

Relevant CE makes you more knowledgeable about the work you are doing or the work you intend to do. The USQS is principle-based. As an actuary, you are responsible for

making “a reasonable, good-faith determination of what [CE] opportunities will enhance [your] ability to practice in a desired field.”

There are also several instances where the USQS is more specific about what constitutes relevant CE:

S Under the General Qualification Standard, Section 2.3.2 addresses the CE needed for issuing a statement of actu-arial opinion (SAO) that blends two or more areas of actuarial practice, stating “[i]n meeting the continuing

education requirement, an actuary should include material in all areas of actuarial practice relevant to the [SAO] (emphasis added).” Earlier this year, the Committee on Qual-ifications helpfully updated its answer to a frequently asked ques-tion (FAQ) dealing with long-term care (LTC) to state that an actuary issuing an LTC-related SAO should ensure that at least some of his or her continuing education relates directly to LTC-related topics. (FAQ 50)S To issue SAOs for NAIC annual statements covered by the Specific Qualification Standards, Section 3 of the USQS requires an actuary to complete at least 15 hours of CE per calendar year that is “directly rele-vant” to the topics listed in USQS Section 3.1.1.

S When an actuary changes areas of actuarial practice—whether the new area is covered by the General or Spe-cific Qualification Standard—Section 4.1 of the USQS requires an actuary to complete CE “that is relevant to statements of actuarial opinion to be issued in the new area of practice.”

S USQS Section 4.3 states that actuaries practicing in emerging or nontraditional fields “can satisfy [CE] requirements by maintaining knowledge of applicable standards of practice, actuarial concepts, and tech-niques relevant to the topic of the statement of actu-arial opinion.” While there may be many ways to earn CE, keep in mind

that the CE you complete must be relevant to the actuarial services you provide to satisfy the requirements of the USQS. Take the time to ensure the CE you choose will meet those requirements—and make you a better actuary.

Make Sure Your CE Is ‘Relevant’

Relevant CE

makes you more

knowledgeable

about the work

you are doing

or the work you

intend to do.

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center stage in 2017. Despite close passage of the American Health Care Act in the House and similar legislation being considered in the Senate, “uncertainty” remains the key word for 2017. Join our panelists for up-to-date information on the status of legislative and regulatory efforts to stabilize the individ-ual market and/or repeal/replace the ACA. (Estimated CE: 1.8)➥ Even More Uncertainties in Health Care (Part 2)—In the first session, pan-elists focused on potential changes to the individual market, but that’s not the only area of uncertainty in the health care sys-tem. Panelists in this session will address the implications of changes to the health care system (and possibly tax reform) for Medicaid, Medicare, and employee bene-fits. (Estimated CE: 1.8)➥ Bending the Cost Curve—With all of the attention being paid to potential changes to the current health insurance system, it’s important not to lose focus on the drivers of health care costs. Efforts to address availabil-ity and affordability of coverage will be for naught if health care spending continues to comprise an ever-increasing portion of the nation’s gross domestic product. Panelists in this session will discuss outcomes from recent demonstration/pilot programs as well as various studies being conducted to eval-uate delivery and payment system reforms and their impact on cost and quality. (Esti-mated CE: 1.8)

Pension Breakout SessionsFollowing are the pension breakout ses-sions for the Academy’s Annual Meeting

and Public Policy Forum. The Academy believes in good faith that Joint Board for the Enrollment of Actuaries (JBEA) continuing professionalism educa-tion credit will be available for these sessions.➥ Multiemployer Pension Plans: Is There a Runaway Ramp Before the Cliff?—Of the more than 10 million peo-ple who participate in multiemployer pen-sion plans, 1 million or more are in plans that are unlikely to be able to deliver the pensions they have promised. In addition, the Pension Benefit Guaranty Corporation (PBGC) is likewise projected to fall short on its commitment to serve as a backstop to these troubled plans. As the clock keeps ticking toward insolvency, stakeholders are reaching deep to find creative steps that will ease the burden on pensioners and be both fair and affordable to the industry and the taxpayers. This session will focus on various mitigation approaches that are currently under consideration. You will hear directly from key parties about the challenges, and possible outcomes. (Esti-mated CE: 1.8)➥ Public Pension Plans: The Pot-hole-Filled Road to Retirement Secu-rity?—Underfunded public pension plans and the increased share of government budgets they consume have generated plenty of headlines, but how deep and pervasive are the problems? This session will focus on the sustainability of state and municipal retirement programs. Speakers will dive inside the data to explore the characteristics and patterns of plans that

are sustainable as well as those that may have problems in the short, intermediate, or long term—and why. Speakers will share their perspectives on how pension plans are evolving in response to growing pen-sion costs and risks, and on how to main-tain a sustainable plan while managing the competing priorities of running a state or local government. (Estimated CE: 1.8)➥ National Retirement Policy Objec-tives: Are We on the Same Page?—Amer-ican taxpayers spend significant resources supporting retirees and encouraging work-ing Americans to save for their own retire-ment, but are we getting what we want? What we need? Social Security is not on a sustainable path, and relying solely on Social Security may not allow retirees to maintain their standard of living. Half of the population is not covered by an employer-sponsored retirement plan, and most who are covered have no guaranteed lifetime income other than Social Security. In this session, speakers will discuss what our national retirement policy objectives should be and assess the adequacy and effi-ciency of current policies in achieving those objectives. (Estimated CE: 1.8)

ANNUAL MEETING, FROM PAGE 2

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2O17 PUBLIC POLICY FORUM

AMERICAN ACADEMY OF ACTUARIES

ANNUAL MEETING

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R E G I S T E R N O W F O R T H E L O W E S T R AT E S A C T U A R Y. O R G

N O V E M B E R 1 4 - 1 5 FA I R M O N T H O T E L WASHINGTON, DC

10www.actuary .org Actuaria l UPDATE JUNE 2017

Registration Now Open for December P/C Loss Seminar

DO YOU PREPARE OR SIGN statements of actuarial opinion on P/C loss reserves for NAIC annual statements, or assist with preparing them?

The Academy’s 2017 “Seminar on Effective P/C Loss Reserve Opin-ions” will be held Dec. 7–8 in Chi-cago. This two-day seminar will deepen your expertise on the lat-est requirements with reviews of actuarial qualification standards

and interactive case studies. Continuing education credit is available. Mark your calendars and plan to attend; reg-istration is open.

➥ The following are members of the new Government Insurance Task Force:

Shawna Ackerman, Stuart Mathewson, Rade Musulin, John Pedrick, John Rollins, Frank Todisco, Robert Walling, and Nancy Watkins.

➥ Dave Heppen joined the Committee on Property and Liability Financial Reporting.

CASUALTY BRIEFS

Casualty News

Health News

Academy Participates, Presents on Health Issues

ACADEMY SENIOR HEALTH Fellow Cori Uccello participated in a meeting of U.S. senators and

a group of health care experts on Capitol Hill in Washington on June 12. She pre-sented a nonpartisan, objective actuarial perspective on the individual health insur-ance market.

Details of the Academy’s analysis of these issues—including the status of the current market and actions to improve its stability and sustainability—are available in the health public policy section of the Academy’s website.

Also on June 12, Uccello participated in a teleconference, hosted by the Common-wealth Fund, which covered the latest developments in the individual health insurance market.

Healthy Talk

With health care reform a prime topic in Washington this month, Senior Health Fellow Cori Uccello (center) participates in a June 28 Urban Institute/American Action Forum panel on stabilizing the individual insurance market.

11www.actuary .org Actuaria l UPDATE JUNE 2017

Subcommittee Urges House to Strengthen Medicare

THE MEDICARE SUBCOMMITTEE sent comments June 1 to the U.S. House of Representatives Ways

and Means Health Subcommittee on pre-serving and strengthening Medicare. The Academy subcommittee cited several long-term financial challenges for the program, including the projected deple-

tion of the Hospital Insurance Trust Fund by 2028.

“Approaches that would sustain and extend the recent slowdown in health care cost growth are likely to cause the least financial pain for policyholders and benefi-ciaries,” the letter noted, adding that such options include medical care delivery sys-

tem reforms that focus on better patient care coordination and financial incentives that reward the high value of care provided rather than high volume of care.

HPC Committees Provide Presentations at the SOA Health Meeting

MEMBERS OF SEVERAL Health Practice Council work groups provided presentations at the SOA Health Meeting June 12–14 in Hollywood, Fla., on the current

legislative and regulatory environment for health care reform, the criteria for evaluating long-term care (LTC) reform, and tele-health from an international perspective.

Shari Westerfield, vice president, health; Senior Health Fellow Cori Uccello; and Barb Klever, vice chairperson of the Individual and Small Group Markets Committee, gave the legislative and reg-

ulatory overview, highlighting the “3 R’s” of repeal, replace, and repair that are being considered in the national health care debate.

David Linn, the Academy’s senior health policy analyst, moder-ated the LTC session, which featured Linda Chow and Chris Giese, members of the LTC Criteria Work Group. Steve Abbs, Ken Ehres-mann, Teresa Winer, and moderator Joe Allen Allbright, all members of the Academy’s Health Practice International Committee, gave the presentation on telehealth, highlighting theory and practice, study review and plan considerations, and regulation.

➥ Greg Fann joined the Risk Sharing

Subcommittee.

HEALTH BRIEFS

Health Groups Provide Actuarial Perspective to Senate on BRCA

IN A COMMENT LETTER sent June 30, the Academy’s Individual and Small Group Markets Committee and Medicaid Sub-

committee analyzed provisions of the Better Care Reconciliation Act of 2017 (BCRA) in

terms of their effect on the affordability and accessibility of health insur-

ance coverage in the individual market and on Medicaid

funding. The letter breaks out

the likely near-term experience from the long-term effects on

premiums, populations covered, and health of the

risk pool. Near-term fac-tors include elimination

of the individual man-date, funding of cost-shar-ing reduction reimburse-

ments for two years, increased external funding, and increased certainty with regard to legislative and regulatory actions.

Longer-term provisions include changes to the premium tax credit structure, widened allowable age rating, possible loosening of the actuarial value and essential health benefits requirements, and expansion of the use of association health plans. These pro-visions will have different, often offsetting effects on affordability and accessibility of individual health insurance. Consequently, “When evaluating the overall impact,” the letter states, “it is important to consider not only the impact of particular provisions, but also how the various provisions interact to affect enrollment decisions, premiums and cost sharing, and federal spending.”

BCRA would also modify the federal funding structure of Medicaid from one based on a percentage of total program expen-ditures to one that caps or limits federal funding to states. Such an approach, the letter states, requires decisions in five key areas:

S Approach to setting state caps; S Treatment of Medicaid expansion populations; S Growth rate methodology; S Program flexibility provided to states; and S Continuing actuarial soundness requirements.

12www.actuary .org Actuaria l UPDATE JUNE 2017

CI Group Submits Update on Corporate Bond RBC Factors

THE C1 WORK GROUP submitted comments to the NAIC with revised recom-mendations on corporate bond risk-based capital factors based on changes to the representative portfolio.

Following the work group’s initial recommendations last October, it continued to review its analysis, placing particular emphasis on those assumptions that are more subjective in nature with the potential to create unintended biases in the factors.

It focused on the following assumptions: com-position of the representative portfolio, recovery assumptions, and discount rate. Based on that anal-ysis, the work group revised its recommendation, including modifications to the base factor, portfolio adjustment formula, estimated impact on life risk-based capital, and alternative base factors for health and property and casualty.

➥ Derek Jansen and Dan Purcell joined the Annuity Reserves Work Group.

➥ Cory Zass joined the SVL Interest Rate Modernization Work Group.

LIFE BRIEFS

➥ Vanessa Soskind joined the Pension Accounting Committee.

PENSION BRIEFS

Work Group Weighs In on N.Y. State Insurance Regulations

THE NON-GUARANTEED

Elements Work Group

submitted comments to the

New York Department of Financial

Services on re-proposed 11NYCRR

48 (insurance regulation 210) on life

insurance and annuity non-guaran-

teed elements.

The comments included techni-

cal and semantic changes to the

regulation, such as replacing the

term “policy” in the definition of

“Experience factor” to “class of

policies,” and recommended the

regulation recognize changes in

costs for reinsurance and other

third-party agreements similar to

changes in other expenses that the

insurer may consider.

Life News

Work Group Releases Issue Brief on Consumer Cost, Choice

THE GOVERNMENT MANDATES Work Group released an issue brief providing information on the impact

of laws and regulations on consumer cost and consumer choice for annuity and life insurance benefits.

This issue brief addresses the differ-ence between “equality” and “equity” in insurance, and its impact on consumer cost, and describes some simple cases

involving life insurance and annuities that illustrate basic insurance principles and show that equity can be different from equality.

The cases are used to show possi-ble impacts of laws and regulations, or “mandates,” that limit insurers’ ability to equitably classify risks on new policies, or that require certain rights or benefits on new policies.

Mandates for annuity and life insur-ance benefits that regulate benefits or limit classification of risk can have impli-cations on consumer costs and choice, the issue brief states, and to remain sol-vent, insurers need to charge premiums at rates sufficient to cover the costs of expected benefits—i.e., the higher the expected costs, the higher the premium should be.

➥ Rob Curry joined the Big Data Task Force.

PRESIDENTIAL COMMITTEE—BIG DATA TASK FORCE

13

risk management & financial reporting News

➥ Laurel Kastrup joined the Risk Manage-

ment and Financial Reporting Council.

➥ Kristin Schaefer joined the Solvency

Committee.

RISK MANAGEMENT BRIEFS

COMMUNICATIONS REVIEW COMMITTEE

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EDITOR

Michael G. Malloy

ASSISTANT DIRECTOR OF COMMUNICATIONS | PUBLICATIONS

Eric P. Harding

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Laurie Young

American Academy of ActuariesPRESIDENT

Bob Beuerlein

PRESIDENT-ELECT

Steve Alpert

SECRETARY-TREASURER

Tom Campbell

VICE PRESIDENTS

Bill HallmarkJeff JohnsonRade MusulinJeffrey SchlinsogShari WesterfieldJoeff Williams

EXECUTIVE DIRECTOR

Mary Downs

DIRECTOR OF COMMUNICATIONS

David J. NolanEXECUTIVE OFFICE

The American Academy of Actuaries1850 M Street NWSuite 300Washington, DC 20036Phone 202-223-8196Fax 202-872-1948www.actuary.org

Statements of fact and opinion in this publication, including editorials and letters to the editor, are made on the responsibility of the authors alone and do not necessarily imply or represent the position of the American Academy of Actuaries, the editors, or the members of the Academy.

©2017 The American Academy of Actuaries. All rights reserved.

Actuarial Update

www.actuary .org Actuaria l UPDATE JUNE 2017

Webinar Covers Exposed Practice Note on Credit for Life Reinsurance

THE RISK MANAGEMENT and Finan-cial Reporting Council (RMFRC) hosted a June 26 webinar, “Exposed Practice

Note on Credit for Life Reinsurance,” which provided an in-depth review of the draft Credit for Life Reinsurance in U.S. Statutory Finan-cial Statements practice note recently exposed by the Reinsurance Committee’s Credit for Reinsurance Subgroup.

Attendees heard about current and emerging practices used to determine the credit for rein-surance that may be taken on statutory finan-cial statements. Comments on the draft can be emailed to RMFRCPolicyAnalyst@actuary.org by July 7.

Presenters Arnold Dicke, chairperson of the RMFRC’s Reinsurance Committee; Jeremy Starr, chairperson of the Credit for Reinsurance Sub-group; and Sheldon Summers, a member of the Reinsurance Committee, covered how the prac-tice note affects:

S The Dodd-Frank financial reform act;

S The covered agreement on prudential insur-ance matters between the United States and the European Union as exposed on Jan. 13;

S Credit for Reinsurance Model Law and Regu-lation changes;

S Regulations covering captive reinsurance structures (i.e., AG 48 and Reserve Financing Model Regulation);

S Changes to Statement of Statutory Accounting Principles 61R;

S the Valuation Manual; and S Updated answers to questions from the prior

draft of the practice note. Slides and audio are available to members free

of charge on the Academy’s webinar page.

RMFRC Visits Capitol HillRisk Management and Financial Reporting Council (RMFRC) members visited Capitol Hill in late June to discuss creation of an Office of the Actuary if Congress decides to establish an independent insurance advocate.

From left are Academy Senior Casualty Fellow Jim MacGinnitie; William Hines, chairperson of RMFRC’s Financial Regulatory Task Force; and RMFRC Vice President Jeffrey Schlinsog